Pakistan Cotton Ginners Association (PCGA) Vice Chairman, Aman-ullah Qureshi, has hailed the State Bank of Pakistan's (SBP) decision regarding issuance of loans to cotton ginning factories to replace their old plant and machinery. He said this scheme would help in the replacement of outdated machinery and installation of modern plants to prepare cotton of international standard.
He said the step to make discounted loans available was aimed at helping to produce quality cotton for the textile value added chain and to meet the power shortages. He said the SBP had taken a right step at an appropriate time by issuing a circular for the help of ginners.
The financing, which shall be available through all commercial banks and development finance institutions, can be availed by the members of PCGA at the mark up rates ranging from 8 to 10 per cent, depending on the duration of repayment period.
He further said the SBP's scheme was specifically for balancing, modernisation and replacement of cotton ginning factories. It could also be availed for cotton seed crushing machines installed in the premises of factories. Financing for the purchase of new power generators up to the maximum capacity of 500kva shall also be available under the scheme.
Amanullah Qureshi said the State Bank of Pakistan, meeting an outstanding demand of the PCGA, had announced a new scheme for cotton ginners with a view to modernise their factories to produce quality ginned cotton for the textile value added chain and to minimise electricity consumption.
This scheme is only available for SME borrowers, as defined in Prudential Regulations for SMEs. This scheme has been effective from September 04, 2009 and shall remain valid up to December 31, 2010 on first come first served basis and subject to the availability of funds under the scheme. The financing, under the scheme, would be available for a maximum period of seven years including a maximum grace period of six months. Financing facilities, under the scheme, shall be provided through all commercial banks and development finance institutions (DFIs).